Clamp-on Submetering Best Practices

Clamp-on submetering is a game-changer for multifamily investors looking to optimize water usage, increase net operating income (NOI), and promote fair billing practices.

This guide covers essential best practices for installing and managing water submeters in multifamily properties, enabling property owners to recover utility costs, identify leaks early, and encourage sustainable water use

Where to install water submeters

Single water supply to each residential unit

A submeter should be installed at the cold water supply line that services all water to a residential unit. Ideally, the submeter is installed directly at or after the water shutoff valve.

One hot and one cold water supply line to each residential unit

Measure both hot and cold

• If feasible, a submeter should be installed on both the hot and cold water supply lines to a residential unit and summed together to generate the total usage to a unit.

Hot or cold water allocation

• If submeters on both lines is not an option, installing a submeter on either the hot or the cold water supply line can be done. When this is done, it’s important to correctly subtract a common area deduction from the total usage before allocating unit costs.  
• Hot water allocation is ideal because hot water usage is directly proportional to the number of occupants.
• If you do hot water allocation, installing submeters on the main water line(s) to each building is also recommended to monitor for leaks or high usage that would otherwise go unnoticed when measuring only one water line. This avoids unexpected high end-user bills.

More than one supply line to each residential unit

• In this case submetering may not be feasible.  If there is a single hot water supply line for the unit, you may still use the hot water allocation method as described above.

How to bill tenants for water utility costs

When using water submetering to bill your tenants for water costs, you should use a full allocation method. This ensures that exactly 100% of the bill is recovered, without the possibility of overcharging (or undercharging) for water.

The billing best practices to follow describe the calculation methodology. Check with your local water authority for any specific rules and regulations regarding water submetering and/or allocation methods.

Usage Rate

To calculate the average water rate for a property, divide the total usage-based water costs that vary based on usage by the total water consumption recorded by all submeters. This includes the costs for actual water consumption, sewer charges, etc.

This method, called a full allocation method, ensures that:

1. Tenants are only charged their fair share of the total utility cost.
2. The full bill is recovered when the property is fully submetered.

Bill Cost Structure

Residential bills should include fixed charges and usage charges.  The fixed portion of the bill should be totalled for the property and divided evenly by the number of units.  The usage charge should be calculated by multiplying the average rate by the consumption in the unit.

• Fixed Charge: A flat fee charged regularly, regardless of how much water is used.
• Usage Charge: A variable fee based on the actual amount of water consumed.

Common Areas

Common area water costs should not be charged directly to tenants. Instead, these areas should have their own submeter to track usage. The common area usage should then be included in the total property water consumption to be divided amongst your property.

Transparency

The bill should clearly explain how charges are calculated and provide access to the master meter utility bills upon request. Ideally, include a link to view the actual master meter bills and the detailed calculations.

Estimated Billing

Estimated billing is when the bill is based on an estimate of water usage rather than actual master meter readings. If estimated billing is used during a given billing period, the bill should contain a statement that the usage is estimated. This is common practice for water utilities.

Record Keeping

Copies of all master utility bills, submeter measurements and bill calculations should be kept for at least 5 years.  

Fees

It’s important to keep fees reasonable and ensure that any fees passed on to end users are in compliance with local rules and regulations.

How to pick the right water submeter

Unlike in-line submeters, there is no standard for accuracy with clamp-on water submeters. Use a  submeter that has a NIST-traceable calibration.

SimpleSUB submeters are the most accurate clamp-on meters available.

Discover how SimpleSUB Water’s over-the-pipe submetering system can simplify installation, ensure accurate tenant billing, and boost NOI.